S
an Francisco has seen a significant decline in home construction this year, with developers completing just 1,205 homes as of now - the lowest number since the Great Recession. This is less than half of the 2,593 homes built last year and significantly lower than the nearly 1,300 units produced in 2011-2012. The city's home construction numbers are also a far cry from the boom years of 2016-2021, when developers completed between 4,500 to 5,250 units annually.

    The city is unlikely to meet its state-mandated goal of building 82,000 homes by 2031, with only 4.4% of its Regional Housing Needs Allocation goal completed so far. To meet the target, San Francisco would need to average 13,000 units per year over the next six years. However, this year's construction includes 600 affordable units and there are currently 4,792 units under construction, with 2,210 being affordable.

    Despite the current slowdown, developers are preparing to build more housing, thanks in part to lower interest rates and a revitalized Downtown market. The city has also created enhanced infrastructure financing districts to allow builders to borrow money against future tax revenue, facilitating projects like the 2,600-unit Potrero Power Station and the 537-unit Mission Rock development.

    Infrastructure work is underway for several large-scale projects, including India Basin (1,525 homes), Treasure Island (1,000 homes), and Balboa Reservoir (282 affordable apartments). The city is also in talks with Prado Group to create an infrastructure financing district for two projects in Laurel Heights, which would add 1,236 homes. Multiphase projects are expected to result in 38,000 of the 72,000 units in the city's development pipeline.

    Next year, the city will be required to rezone parts of San Francisco to allow multifamily housing in traditionally residential neighborhoods. Meanwhile, some 800 construction trades specialists remain unemployed.